John Stensholt

Nathan Tinkler is back in coal, but there are doubts about the price he has paid for his new Queensland mine and the quality of the asset.

Mr Tinkler, 38, shocked the market on Wednesday when it emerged his Singapore investment vehicle, Bentley Resources, will buy the Wilkie Creek thermal coalmine in Queensland from Peabody Energy in a deal worth up to $150 million.

The deal includes $US70 million in cash and is backed by other investors, including New York investment bank Leucadia and Jeffries.

But Fairfax Media understands the underbidder for the mine, which has been shut since December and has been on the market for about two years, was only willing to pay as little as $US20 million in cash. There were, at best, just two other bidders.

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One coal industry source said it was a ''great deal for Peabody''.

Industry sources also said it would be hard for Mr Tinkler to extract good value from Wilkie Creek.

There are questions, given the depressed thermal coal price that shows little sign of rising until at least the latter part of the year, whether Mr Tinkler will be able to pull off his previous, and at times highly successful, strategy of buying an undervalued asset and selling it a relatively short time later at great profit.

One coal industry executive, who had investigated buying Wilkie Creek, said if Peabody had been unable to make the mine work from a fiscal point of view when thermal coal was selling at $US100 a tonne about two years ago, it would be even more difficult for Mr Tinkler with coal about $US70.

''He either needs the Aussie dollar to suddenly drop 15¢ or the coal price to quickly go up again,'' he said. ''It does look like he's taken another big bet, and the question is where he's getting most of the funding from.''

The executive also said there were concerns about the cost of sending the coal through Brisbane's port and possible future environmental repair liabilities.

Mr Tinkler disagrees he has paid too much and that Wilkie Creek is not viable. ''I think we are at the bottom of the cycle,'' he said. ''But whether we are at the bottom or not, I'm certain this is the 'value' part of the cycle.

''While the market is oversupplied we are still in a market where I believe high-quality thermal coal is hard to secure, so now is the time to buy it.''

As well as the $US70 million cash, the deal also includes taking on several charges, including $34.5 million for potential port and rail contractual liabilities, $21.1 million for the acceleration in the timing of asset retirement obligations, and $4.8 million for other charges.

Mr Tinkler also said he had first considered making a bid for Wilkie Creek about 18 months ago, when Peabody's asking price was said to be as high as $600 million.

The mine's closure at the end of last year resulted in the loss of about 200 jobs. Mr Tinkler indicated on Wednesday he would be keen to hire as many of those former employees as possible and reopen the mine as soon as he could.

The deal is the latest in what has been a six-year roller-coaster ride for Mr Tinkler, who debuted on the BRW Rich List with a $426 million fortune in 2008. His wealth reached $1.13 billion on the 2011 BRW Young Rich List before his dramatic fall in 2013, after spiralling debts and a cooling resources sector put a huge dent in his wealth.

Though he has now moved to Singapore, Mr Tinkler has remained in the spotlight in Australia. On Friday he will appear before the NSW Independent Commission Against Corruption regarding alleged donations to a Liberal Party slush fund.